Proper phonics (i.e. one sound corresponding to 1, 2, 3 or more letters) is the best way of teaching reading. A great programme for that is THRASS (Alan Davies) which teaches the 44 sounds of English by giving spelling choices for each one. It's clear, fun and has proven results. Reading and spelling and writing go together, are self-supportive.
If you don't have money for marketed resources, then the following are a great help when teaching reading:-
plastic letters with vowels in red and consonants in blue; these mean a child can try to spell with them and reach the correct version without having to write down incorrect responses first - it promotes success and helps memory, being multi-sensory
writing from a child's dictation describing a picture, then having the child read it back to you
making it fun, by starting with words, then phrases, then sentences, all the while using encouragement and reward (nothing is 'wrong', everything is 'a brilliant effort' or 'correct!')
Read to them often; let them follow easier texts, or just let them listen to wonderful stories and the interest will inspire the will to learn.
For those who want more help, see my hubs on helping dyslexic children.